Best Buy says cautious, deal-chasing consumers and the presidential election kept quarterly sales muted.
The electronics retailer released earnings Tuesday (Nov. 26) showing a 2.9% drop in comparable sales, higher than the 1% dip forecast in the company’s guidance.
CEO Corie Barry said Best Buy’s sales performance was impacted by softer-than-expected consumer demand in September and October.
“We attribute this to a combination of overall ongoing macro uncertainty, customers waiting for deals and sales, and distraction during the run up to the election, particularly in nonessential categories,” Barry said. “We expected lower demand between sales events, but the impact was even steeper than we estimated.”
In recent weeks, with the election decided and holiday sales underway, Best Buy has seen an uptick in consumer demand, the CEO added. The company saw comparable sales growth in computing, tablets and services, with Barry noting that this growth “was more than offset by declines in appliances, home theater and gaming.”
The company began its Black Friday sale a week earlier this year, and has also reintroduced its Doorbust concept, giving its paid members early access to this perk. Enterprise comparable sales for the first three weeks of November are up around 5% compared to last year, Barry said.
As PYMNTS wrote Tuesday, a number of retailers are reporting results that reflect caution among consumers.
For example, Ross Stores reported a 1% increase in comparable sales, with CEO Barbara Rentler disappointed in the results, as they represented a slowdown compared to the strong first half of 2024.
“We should have better executed some of our merchandising initiatives,” Rentler said, adding that the company missed chances to capitalize on shifts in consumer preferences.
Research from PYMNTS Intelligence’s “New Reality Check: The Paycheck-to-Paycheck Report: Pessimism About Pay Rises Offsets the Effect of Falling Inflation,” shows that 83% of consumers are at least somewhat worried about current and near-future economic conditions.
Meanwhile, offering deals and sales may not be what consumers want this year, as many shoppers have begun to feel overwhelmed, as noted here this week.
The PYMNTS Intelligence report “Intrigue or Fatigue? Amid Crowded Deals Landscape, Financial Lifestyle Drives Consumers’ Black Friday Interest,” found that a third of people surveyed felt “bombarded” by sales promotions. And a little more than 4 in 10 said the increased frequency makes the deals feel less special.
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